Bitcoin price analysts are struggling to identify the rationale behind the sudden price spike in the cryptocurrency’s value as it broke the US$400 mark on November 3, surpassing a market cap of more than US$6 billion.

One thing for sure is that nobody can deny the effect China has had on the market in November 2013, the first time it surged past the US$500 mark. This time around, however, things might be a little different. According to research done by Finance Today’s Izabella Kaminska, this recent Bitcoin rally could be caused by a Pyramid Scheme named MMM, orchestrated by Sergei Mavrodi, a convicted Russian serial Ponzi scheme organizer.

Mavrodi, whose latest Ponzi scheme targets Chinese investors, has never shied away from admitting that his enterprises are all Pyramid schemes, in fact, he promotes his new program as a PyraMMMid where investors are urged to post profit testimonials on YouTube to “increase their revenues.”

Sergei Mavrodi

According to the English version of the website, new members are required to purchase Bitcoin, which they then pump into the Pyramid Scheme’s “mutual aid” program, paying off the earlier adopters, with a promise of 30% return on their investments at the end of the month.

The program then converts bitcoin to its own units called MAVROs, 1,000 of which are equivalent to 1,000 Yuan. Those who invest are placed into tiers depending on the value they invested in, and can only start cashing after a 2-week freeze period (which turns into a one-month freeze period if the investor chooses to invest more than US$3,000).

MMM seems to be wobbling in a gray legal area in its practices, given that the scheme involves money transfers between private persons at their own will, making it entirely legal. Although incarcerated multiple times for defrauding investors time and time again, Mavrodi remains a free man at the moment.

In fact, although MMM China has been active for little over a year now, it went viral through Bitcoin’s price increase, and YouTube has been littered with hundreds of testimonial videos vouching for the website’s authenticity, as shown on their testimonial page.

This is not the first time Chinese investors were duped into investing in Cryptocurrency-fueled Ponzi schemes, seeing how Litecoin was pumped to 8 times its value over the course of a couple of weeks last July. Back then, more than US$76 million’s worth of Litecoins were moved into one address, representing a whopping 22% of all Litecoins to exist. Additionally, BTCC CEO Bobby Lee warned investors of the scheme just last month and noting that the bitcoin exchange has no affiliation with MMM Global.

It may be impossible to prove whether or not Sergei’s caused the spike in its entirety, but it is quite plausible for it to have been the fuse that lit the fire.